Smeal College of Business Researches Recalls and Brand Loyalty

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Consumers with high brand commitment, defined as people who are “attached to brands, form close relationships with them, and have a general desire to maintain this close relationship,” may take a dimmer view of product recalls than consumers with low brand commitment, according to research published by Smeal College of Business professors in 2013. The findings contradict the prevailing opinion that high brand loyalty helps companies weather periods of negative publicity.

The Smeal researchers investigated consumer reactions to recalls in cases where the products being called back could cause death or serious injury. They discovered that high brand commitment was a liability in those situations. Researchers speculated that consumers might feel more disappointed than usual when a company they particularly like lets them down in such a way. The findings did not hold in cases of low-severity recalls, in which the researchers confirmed previous studies stating that brand loyalty tended to mitigate the negative effects.

Charlie Rose Honored for Contributions to Medical Knowledge

A member of the Columbia-Presbyterian Hospital Health Sciences Advisory Council, Dr. Lindsay Rosenwald has assisted in bestowing the Council’s annual Award for Distinguished Service to individuals who have significantly contributed to the health and well-being of society. A physician and investor, Dr. Lindsay Rosenwald has spent much of his career as the founder and backer of biotechnology companies that have developed medicines that have greatly improved the health of many patients.

Numerous well-known individuals have received the Advisory Council’s Award for Distinguished Service, including Christopher Reeve, Mike Wallace, Anna Wintour, and Sanjay Gupta. In 2012, the award was given to Charlie Rose, a television personality and anchor. Rose, who co-anchors the TV shows Charlie Rose on PBS and CBS This Morning, worked with Nobel Prize winner Eric Kandel on PBS’ The Brain Series. The series, which focused on the study of the human brain, addressed topics such as aging, creativity, and social interaction. The Brain Series also has examined the most current research into mental illness, including Alzheimer’s disease and schizophrenia.

Abington Health Expands Services, Facilities

A physician and investor in the biotechnology field, Dr. Lindsay Rosenwald began his medical training at the Temple University School of Medicine. While starting his private medical practice, Dr. Lindsay Rosenwald completed an internship at Abington Memorial Hospital in Pennsylvania.

The hospital is now the flagship facility of Abington Health, a not-for-profit regional health care provider that consistently offers innovative and advanced care to its patients. Abington Health’s providers assist more than 700,000 patients annually, and the health care system employs in excess of 1,200 physicians. Abington Health has earned Comprehensive Stroke Center certification from the Joint Commission and the American Heart Association/American Stroke Association.

Recently, the provider installed the latest-generation MR system, which offers patients a better MR scan experience and produces high-resolution images that help physicians to make more accurate diagnoses. Furthermore, the health care system added a fourth outpatient center. The new 48,000-square-foot facility houses outpatient services and several doctors’ practices that provide care for a wide range of patients, ranging from newborns to senior citizens. The center encompasses a laboratory draw site and an imaging center.

Early Biotechnology IPOs Led to Greater Growth

As one of the first physician analysts on Wall Street, Dr. Lindsay Rosenwald came to the biotechnology marketplace with a strong understanding of what would benefit medicine in general and secure profits at the same time. Entering the world of biotechnology investment in the mid-1980s, Dr. Lindsay Rosenwald built upon a precedent largely set by Genentech, SmithKline, and other innovative biotech firms 10 years earlier.

With SmithKline’s development of Tagamet (the first-ever “blockbuster drug” with $1 billion in annual revenue) and Genentech’s advances in rDNA technology, the mid-1970s proved a fertile ground for the nascent biotech sector. When Genentech launched a highly successful initial public offering in 1980, opening itself to investment on Wall Street became the next logical step for innovators in the life sciences, followed by other, early IPOs Cetus, Applied Biosystems, and Amgen. At the same time, much larger pharmaceutical companies began acquiring promising biotech firms that had yet to go public, creating multiple pathways for these new drug developers to grow and expand.

Amgen Moves into Cancer Treatment with Purchase of Onyx

New York City-based biotech financier Lindsay Rosenwald, MD, possesses over 20 years of experience in investing in health care and life sciences companies. In 2008, Lindsay Rosenwald co-founded Opus Point Partners to create a premier investment fund focused on biotechnology.

After several months of discussion, Amgen Inc. agreed to buy Onyx Pharmaceuticals Inc. in a transaction valued at $10.4 billion. The deal will bolster Amgen's product line with Onyx's slate of cancer-fighting drugs, including Kyprolis, a treatment for a form of blood cancer. Until this acquisition, Amgen had mainly produced drugs aimed at supporting rather than treating cancer patients. Because the population is aging and the oncology market is expected to grow as a result, Amgen's purchase of Onyx is widely considered a sound, forward-looking move.

This buyout is the latest in a pharmaceuticals industry in which numerous established firms have sufficient cash on hand to acquire smaller companies. From an investment perspective, this market environment offers many opportunities for investors in small, innovative companies to see their stakes rise dramatically in value as larger firms seek to enhance their product portfolios.

Bullish Biotech a Boon to Health Sector Investors

As the co-founder of Opus Point Partners, Lindsay Rosenwald, MD, devotes his considerable expertise as a physician and entrepreneur to managing one of Wall Street's top biotechnology-focused investment funds. Top investors like Lindsay Rosenwald have taken serious notice of the very bullish biotechnology sector this year.

A number of biotechnology acquisitions have been announced in the past few months, including:

- Valeant Pharmaceuticals International agreed to buy Bausch + Lomb for $8.7 billion, greatly expanding Valeant's eye care business.

- Actavis Inc., which manufactures generic drugs, announced the purchase of Warner Chilcott in an $8.5 billion transaction.

- Thermo Fisher Scientific, a maker of scientific instruments, acquired another instrument manufacturer, Life Technologies, for $13.6 billion.

- Amgen announced a deal worth $10.4 billion to buy Onyx and its line of cancer treatments.

Typically, a buyout forces the purchasing company's stock price to drop and the acquired company's price to spike. In recent biotech acquisitions, however, both parties' stock prices have risen, suggesting strong investor confidence in the sector. This attitude is further reflected in the recent positive performance of many biotechnology exchange traded funds (ETFs), which track along with sector-wide trends.

Many analysts believe this positive trend will continue as large firms seek to buy out small, agile companies with innovative new products. Given the aging trends in the populations of developed nations, investing in life sciences today would appear to be a good bet for the long term.

Biotechs Experience Success after Initial Public Offering

The co-founder of the New York City asset management firm Opus Point Partners, Lindsay Rosenwald has built a career around biotechnology investment. Since the 1980s, Lindsay Rosenwald has identified investment opportunities in the medical sector, having served as one of Wall Street's first physician analysts.

As of July 2013, 16 biotechnology companies have gone public this year, with more than half a dozen companies completing initial public offerings in June alone. Share prices for these firms are now at an average of 48 percent higher than their offering prices. This jump is due in part to Onyx Pharmaceuticals' recent refusal of a $120 per share buyout offer from international giant Amgen. Onyx's demand for a higher price launched a wave of stock increases for biotechs across the country. In mid-July, the New York Times reported that "four of the top 10 performing companies on the Nasdaq year-to-date were biotechs."

In addition, larger companies have acquired venture-capital-backed biotechs. In the second quarter alone, industry leaders bought out five such firms. Moreover, pharmaceutical companies often target small biotechs as licensing partners, saving themselves the upfront investment in research and development.